Future Contract : 1 month, 2 month or 3 month which one should i buy?

General
1

Take the case of L&T

FEB end - 1712.1 ( margin - 53066)

March End - 1721.55 ( margin - 53419)

April End -1738.40 (margin-53875)

If i am bullish , shouldn’t i buy APRIL end instead of FEB/MAR end because there is greater chance of price advancement ? EXPERT OPINION here please ?

2

If you are close to expiry(like now), you can buy the next month contract. Otherwise, buy the current month. Liquidity is high in the current month, medium liquidity in the next month contract, and low in the further month contract. So its best to buy current month always, unless you are close to expiry.

3

Ankit,

You can go for next month if you are in expiry week. And look out whether you have enough liquidity in the next month. For far month i would say no, its just my view.

1 Like
4

But the liquidity will automatically increase in the far month CONTRACT in due time when month of expiry comes ? Will ROLLING over be as good as buying the 3 month contract though ?

5

Yes liquidity will automatically increase in the far month , if you are on expiry day.